Luye Pharma : Announces 2016 Interim Results

[31 August, 2016, Hong Kong] A leading innovative pharmaceutical company with strong R&D capability and global vision in China market-Luye Pharma Group Ltd. (the 'Company', together with its subsidiaries, 'Luye', stock code: 2186.HK), announced its interim results for the six months ended 30 June 2016 ('Period under Review').

In the first half of 2016, a number of policies in regards of China's pharmaceutical industry have been issued by the government. The government continues to strictly regulate the industry. Although the industry growth rate rebounded slightly, it is still subject to the macro-environment. By leveraging its product and marketing advantage, Luye has achieved continuous and steady growth. For the six months ended 30 June 2016, as compared to the same period of last year, the revenue of Luye increased by 6.1% to RMB1,489.1 million, net profit attributable to parent company increased by 10.2%, profit for the period increased by 7.3%. Gross profit increased by 10.4% and EBITDA increased by 8.8%. Profit attributable to shareholders represented a growth of 10.2%. The Board declared an interim dividend of RMB0.032 (equivalent to HK$0.037) per share for the six months ended 30 June 2016.

In the first half of 2016, the sales of innovative drugs maintained steady growth thanks to further deepen market penetration and expand the market share of its key products. The Company believes that its five key products are competitively positioned for high prevalence medical conditions that are expected to grow stably in China. Compared to 2H15, sales revenue and net profit of 1H16 increased by 28% and 15% HoH respectively, reflecting the favorable upside momentum.

2016 marks a milestone for the international presence of Luye. In July 2016, the Company announced to acquire the transdermal drug delivery systems (''TDS'') and implants business from Acino, through the purchase of the entire issued share capital of Acino AG and Acino Supply AG (the 'Target Group'). With the Target Group's R&D and manufacturing headquarters in Germany, it is one of the largest independent transdermal systems manufacturers in Europe. The product portfolio focuses on more sophisticated and higher margin specialty patch categories such as CNS, pain and hormone spaces under several successfully commercialized and hard-to-make formulations. It has a proven R&D and successful product launch track record. Its robust product pipeline also offers potential to deliver multiple products into the markets over the next few years. This acquisition will help form strong synergy for Luye's existing business no matter in terms of pipeline, sales channel or R&D. The Company believes after the successful delivery of the project, Luye will accelerate its step into the international market and strengthen its international presence through methods of M&A, cooperation, etc.

At the same time, Luye's overseas R&D is in steady progress. The Goserelin Acetate Extended Release Microspheres for Injection for the treatment of carcinoma of the prostate and breast cancer has obtained the approval from the United States Food and Drug Administration ('USFDA') and CFDA to initiate Phase I clinical trials. Other product candidates like Gotigotine Extended Release Microspheres for Injection will directly initiate Phase III clinical trials after communicating with USFDA. The Company will apply for the NDA of Risperidone extended-release microspheres for injection to USFDA while it will also start the application for clinical trials in Europe.

The management of Luye Pharma commented that:' The steady performance Luye has achieved for the first half of 2016 is due to the hard work of all our staff. We will firmly execute the established strategy and take the road of innovation and internalization. The Company will continuously introduce measures to improve our profitability and enhance efficiency in key aspects of its operations. In domestic market, we will continue to improve the market shares in the three therapeutic areas of oncology, cardiovascular system and diabetes and put more emphasis on nurturing the CNS drug market. In terms of internalization, we will enhance Luye's international capabilities and accelerate its penetration into broader therapeutic areas and geographies. We are confident that with our strong competitive positioning of our innovative products, strong pipeline of product candidates, sales and marketing networks, proven R&D capabilities as well as our capabilities to execute strategic acquisitions, Luye is well positioned to enter a new phase of rapid growth and strive to become the most respected leading global pharmaceutical enterprise. '